London Forex Report: Buck Bulls Looking For Yellen Love

London Forex Report: Buck Bulls Looking For Yellen Love

London Forex Report: All eyes will be on Fed Chair Yellen semi-annual testimony before Congress this afternoon. Her remarks will be closely scrutinised to get cues on policy tightening path this year, especially on odds of a March rate hike, assessment on the new government’s policy on the economy and development/ discussion for unwinding the Fed’s balance sheet. A report from New York Fed showed that consumer price inflation expectation rose to the highest level since mid-2015, strengthening the case for tighter policy this year. USD strengthened against 80% of its G10 counterparts on improved economic sentiment as markets await Trump’s proposed tax cuts. The Dollar Index reversed losses from Asian trade and advanced throughout European and US trade to close up 0.16% at 100.96.

FX Majors: EUR Greek bailout negotiations dominated headlines the last two days. The European Commission also warned that growth in the Eurozone would moderate to 1.6% in 2017 from last year’s 1.7% before picking up again to 1.8% in 2018. GBP will be looking to build on its bullish momentum following a recent run of impressive local data when it takes in UK CPI today. Anything on the hotter side of expectation will likely give the currency another boost against the Buck. JPY According to a Bloomberg report, the Bank of Japan now holds more than 40% of Japanese government bonds. And there is no sign of that BOJ’s buying will be stopping or slowing anytime soon, even as the BOJ’s yield curve control is driving unprecedented purchases of benchmark 10-year debt, aggravating concerns the central bank is at risk that it will run out of willing sellers.

EURUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish

Technical: Near term support sited at 1.0670 removed and now becomes near term resistance a close back below 1.0580 resets near term bearish bias, opening a move to test symmetry swing support at 1.0515. Only over 1.0710 stabilises selling pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

GBPUSD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish

Technical: Equidistant swing objective at 1.2679 capping advance for now. Near term support sited at 1.2345 survives on a closing basis prompting sharp reversal suggesting a retest of recent cycle highs, a close below 1.2330 opens 1.2236 symmetry swing support. Near term resistance is sited at 1.2580
Retail Sentiment: Neutral
Trading Take-away: Neutral

USDJPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bullish

Technical: Only a 112 sustained breach will open 110.70 symmetry swing support underpinned by 109.90 50% retracement of the move from August 2016 lows. Near term resistance sited at 113.30 removed and now becomes near term support, a close over 114.50 reasserts upside targets.
Retail Sentiment: Neutral
Trading Take-away: Neutral

EURJPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish

Technical: Symmetry swing support at 120.40 removed, the failure below 120.40 opens 118.70 as the next downside objective. Near term resistance sited at 121.50 a close over 122.10 resets attention on upside targets.
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD eased for the second straight session on Monday extending the selloff from last Friday due to Trump’s upcoming “phenomenal” tax plan comments which extended the strong rally in US stocks. This gold price decreased by US$10 to close at US$1,224.40. OIL prices went south on Monday (13 Feb) despite OPEC’s Monday report that said that the group’s total production fell by 890,000 barrels in January (from Dec) and a compliance record of 90%, very much in line with the International Energy Agency’s report released on 10 Feb, a sign that OPEC is following through on its promise to reduce production. AUD Australia’s NAB business conditions index climbed higher to 16 in January (December: 10), marking its highest level since October 2007. The survey showed that firms were more willing to hire and increased capital spending as economic outlook improved, pushing confidence indicator up to more than a 3-year high last month. The index surged to 10 in January (December: 6). CAD Canadian Prime Minister Justin Trudeau visited US President Donald Trump at the White House on Monday and in a joint press conference, Trump said that America is deeply fortunate to have a neighbour like Canada and hailed the opportunity to “build even more bridges” of commerce. PM Trudeau reiterated that NAFTA is a real concern for many Canadians because their jobs depend on trade with US and he hoped that any changes to NAFTA must continue to allow free flow of goods and services.

AUDUSD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish

Technical: The next upside objective is sited at .7750. Near term support is sited at symmetry swing level .7600 ahead of pivotal .7449
Retail Sentiment: Bearish
Trading Take-away: Long

USDCAD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish

Technical: 1.3150 resistance eroded, over 1.32 opens a move back to test 1.3370.Price action remains erratic as price attempts to base above pivotal 1.30. Near term support is sited at 1.3050.
Retail Sentiment: Bullish
Trading Take-away: Short

XAUUSD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish

Technical: The 1225 upside breach confirmed the anticipated move to 1245 as 1218 supports expect a retest of last weeks highs, a failure below 1206 opens a retest of 1180.
Retail Sentiment: Neutral
Trading Take-away: Neutral

USOIL
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish

Technical: Rejection from equality objective area at 55.30, a close below symmetry support at 50.68 confirms a medium term high and opens a retest of pivotal 49.00. Near term resistance is sited at 54.50.
Retail Sentiment: Bearish
Trading Take-away: Long

Posted in Forex Analysis, London Forex Report, tagged with on